The Lightning Stock Exchange (LISE) will have its first tokenized IPO next week for French aerospace and defense parts manufacturer ST Group. While this is LISE’s first IPO, LISE is part of Kriptown, a company that has been helping SMEs secure funding via a tokenized exchange for a few years. But the tokenized stock exchange launching on April 9 is at a different level. Kriptown backers include BNP Paribas, CACEIS and BPI France.
LISE received its DLT Pilot Regime DLT TSS license in October allowing it to operate both a multilateral trading facility (MTF) and a settlement system (SS), which is a cut down version of a central securities depository (CSD). The EU regime aims to relax certain regulatory burdens, including allowing a single trading and settlement venue, and permitting retail participants to transact directly without brokers. Only six firms have been licensed to date, four of which are DLT TSSs, with LISE the only one to position itself as a stock exchange. LISE also has the most exemptions, one more than 21X and Securitize which are both allowed to have retail investors transact on their platforms.
While the DLT Pilot Regime permits licensed platforms to operate on an EU wide basis, the ST Group IPO appears to only be open to residents of France. That likely reflects the size of the offering rather than a platform limitation. In the EU, public offerings below certain thresholds are exempt from the full prospectus requirement, with France currently setting that threshold at €8 million ($9m). Offerings relying on this domestic exemption cannot be passported across borders. For a company with €3 million ($3.5m) in revenues, a raise below that threshold seems probable.
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